Poor sentiment hits rally prospects

Poor sentiment hits rally prospects

TOKYO (AFP): Depressed regional sentiment looked set to nullify the customary rally ahead of the Lunar New Year celebrations as markets generally lost ground Friday amid a weakening Indonesian rupiah, dealers said.

The rupiah, which hit a historic low of 16,500 to the U.S. dollar on Thursday before recovering to end the week at around 13,000 in Asian trading, has given a sharp blow to overall regional confidence.

Despite the regional turmoil, Japanese share prices staged a quick 2.3 percent bounce on bargain-hunting and futures-linked buying by foreign investors, which dispelled the otherwise cautious mood ahead of the weekend amid the sustained slide of the rupiah, brokers said.

The key Nikkei stock average of 225 selected issues on the Tokyo Stock Exchange ended 383.42 points higher at 16,789.11, after touching the high of 16,797.10 near the close.

The Nikkei 225 index rallied more than four percent over the past week.

In Hong Kong, shares closed 0.4 percent higher on a technical rebound, dealers said.

Dealers said the region had little comfort to offer with the Indonesian rupiah testing a new low, adding that the local rebound might not be sustained.

The key Hang Seng index gained 36.47 points to close at 8,920.20 points.

In Singapore, share prices closed 0.8 percent weaker, but off their lows, as lingering concerns over the crisis in Indonesia and higher interest rates weighed on investors.

"That breath of fresh air from the IMF and the promised reforms have become yesterday's news," said Glen Ow, dealer of Ong and Co., referring to an agreement Jakarta inked with the International Monetary Fund this month promising to implement reforms.

Sentiment over Indonesia was unlikely to improve until after the Indonesian presidential election in March, he added.

The benchmark Straits Times Industrials index fell 9.66 points to 1,259. 83, while the broader All-Singapore index was lower by 4.11 points to 371.66.

In Sydney, Australian share prices rose 0.9 percent as a buoyant resource sector surged in late trade, outweighing poor performances by several leading bank issues.

The Australian Stock Exchange's main indicator, the All Ordinaries index, rose 23.9 points to 2,623.3.

In Kuala Lumpur, the key stock index closed 2.9 percent lower as investors squared positions ahead of a long break for the Chinese Lunar New Year holidays, dealers said.

The Kuala Lumpur Stock Exchange's 100-share weighted composite index fell 16.64 points to end at 558.57, off an earlier low of 548.61. A senior dealer at a local brokerage said a mild technical rebound helped lift the market off earlier lows.

In Bangkok, Thai shares posted marginal gains, closing 0.5 percent higher as investors waited for the outcome of negotiations between Finance Minister Tarin Nimmanahaeminda and the IMF, dealers said.

The Stock Exchange of Thailand (SET) composite index rose 2.07 points to finish at 422.87 points, while the selected SET 50 index added 0.16 points to 31.45.

In Manila, Philippine share prices slipped 0.2 percent on a falling peso and the weakness of regional bourses and currency markets, analysts said.

"The volatility of regional currencies and markets will continue to have a major effect on Philippine capital markets," said Spencer Yap of BPI Securities.

The Philippine Stock Exchange composite index fell 3.54 points to close at 1,704.07.

In Seoul, share prices closed 0.6 percent higher on the Korea Stock Exchange in volatile trade on foreign buying support for blue chips, dealers said.

Dealers said the market witnessed a "dogfight" between sellers and buyers throughout the day.

"Seoul appeared to be afraid of the regional market woes yesterday but today it was not," said Yu Ji-Eun, a dealer with Samsung Securities.

The composite index closed up 2.87 points at 486.86.

In Shanghai, the B shares, nominally reserved for foreign investors, rose 3.1 percent on institutional buying of heavyweight stocks, analysts said.

The Shanghai Stock Exchange's B share index rose 1.42 points to close at 46.92 points while the A share index of locally- traded stocks rose 19.21 points, or 1.5 percent, to 1,293.78 points.

In Taipei, the Taiwan stock market was closed for the Lunar New Year holiday. Markets will resume trading on Feb. 2.

In Auckland, New Zealand share prices closed barely higher on the back of a rebound by Telecom Corp., brokers said.

The NZSE-40 capital index rose one point to 2,245.92.